Agenda item

A report with the investment analysis at Annexes A and B was presented. This confirmed that, at 30^th September 2023:

(i)      total long term treasury investments (over 12 months) amounted to £10.7m

(ii)      short term investments (less than 12 months) amounted to £13m

(iii)     the Council also held £16.5m in non-treasury investments, comprising capital loans to specific service providers and limited companies

(iv)  the total amount of Public Works Loan Board (PWLB) loans was £99.4m, comprising £43.4m General Fund loans and £56m Housing Revenue Account loans.

Following consultation, the Government had extended the ‘IFRS 9 statutory override’ until March 2025. Consequently, the General Fund would continue to be insulated from gains and losses in the capital value of the Council’s long-term investments in the following four funds:

·      CCLA Property Fund

·      Schroders Credit/Bond Fund

·      UBS Multi Asset Fund

·      CCLA Diversification Fund.

However, the Government’s commentary on the consultation outcome suggested that the override might not be further extended. In that respect, the Council’s Investment Performance Equalisation Reserve (IPER) would mitigate against the risk of reductions in the carrying value of the above funds from impacting upon the General Fund balance. At the previous meeting, it was noted that IPER surpluses could be released to the General Fund if and when confidence in the assets’ market values recovered. The current carrying loss had increased to £1.5m and it remained uncertain whether market values would recover by the time the current override elapsed. The Chief Finance Officer confirmed that the 2023/24 investment outturn report (to be submitted to the Sub-Committee early in the next financial year) would enable Members to consider options for utilising investment income and use of the IPER.  

A Quarter 2 update on performance against the Council’s treasury and other prudential indicators was also submitted. This included commentary on a new Public Works Loan Board discounted rate for Housing Revenue Account borrowing, made available from 15^th June 2023. Advice would be taken from Arlingclose and the Centre of Expertise on whether accessing this rate offered good value. (The Council’s HRA debt was currently funded by internal borrowing).

            R E S O L V E D – that the following be noted:

A.    the Council’s investment and borrowing position at 30^th September 2023 as set out in Annexes A and B;

B.    the Council’s actual performance against the indicators set within the Treasury Management Strategy for 2023/24 in Annex C;

C.    the commentary from Arlingclose on the external context for treasury management; and

D.    the update on the performance of the Council’s long-term treasury investments.